Will Office Depot open lid on category for NASCAR?

Office Depot’s announcement last week that it will sponsor NASCAR left many
marketers and teams optimistic that competitors in the office products category
will follow.

Office Depot, which becomes the sport’s first official office products partner
in a two-year deal with an option for a third, has been given category exclusivity
in NASCAR’s Nextel Cup, Busch and Craftsman Truck series. Financial terms
of the deal were not released, but industry insiders estimate the deal to be in
the low seven figures annually.

Office Depot, a client of The Marketing Arm for several years, had previously
done local team deals and a U.S. Olympic Committee deal. Lynn Connelly, director
of strategic alliances for Office Depot, said the company dropped its USOC sponsorship
and picked up the NASCAR deal because of the sport’s ability to provide both
national relevance and local activation opportunities.

But marketers and teams are most interested in the fact that the company also
plans to unveil a Nextel Cup team sponsorship later this month.

Jim Doyle, president of Retail Sports Marketing, which specializes in motorsports,
said Office Depot competitors’ interest in NASCAR has immediately been raised
by the signing of the partnership.

“I wouldn’t at all be surprised to see other people get in, because
what this has done is raise the level of awareness of NASCAR in that category,”
Doyle said.

Wally McCarty, director of marketing for Penske Racing, said Office Depot’s
move will have a positive effect on tracks and teams.

“It might provide category exclusivity with NASCAR, but it will allow tracks
and/or teams to develop relationships with that company or its competitors,”
McCarty said.

The timing of the announcement, though, is tough on competitors in the office
products category. With the green flag set to drop at Daytona in a little more
than a month, most teams and tracks have nailed down sponsorship programs for
2005.

“It is hard to react,” McCarty said. “Plans are in place.”

Connelly said she was not sure whether competitors like OfficeMax and Staples
would look to NASCAR to grow their brands anyway. Officials for OfficeMax and
Staples could not be reached by press time.

“I think NASCAR is a big decision for any company,” Connelly said. “Our
competitors are playing in different spaces as far as sponsorships.”

Ben Geisler, senior vice president of Atlanta-based Next Marketing, which has
The GM Card and Duraflame as motorsports clients, said the deal is significant
because it could spawn a change in strategy within the office products category.

“Those companies in general have always been very big supporters of local
professional sports teams and their venues,” Geisler said. “The hope
in [NASCAR] now is that since Office Depot has taken the leap, the others will
follow.”

Office Depot is expected to produce NASCAR-themed creative in time for the Daytona
500. Two tag lines have been approved for use: “Where NASCAR Stops for Office
Products” and “Taking Care of Business for NASCAR.”

While the rights garnered by Office Depot from the league do not permit the retailer
to pass through NASCAR intellectual property, the broad agreement does grant Office
Depot exclusivity across retailing office equipment, technology products and services,
computer hardware, software, peripherals, and office furniture, along with copy
and printing services, which would preclude a separate deal with a FedEx Kinko’s-type
business.